MR. GEARAN: Why don't we get started. This is a
BACKGROUND briefing, not for camera. There will be <name-delete-1>
and <name-delete-2>.

Both of them will be ON BACKGROUND and can be identified
as administration sources, although <name-delete-2> can be identified as
Administration Official.

SENIOR ADMINISTRATION OFFICIAL: I'm sure you're
primarily interested in the North Korean nuclear issue and the other
senior colleague will give you a rundown on that before we get to
your questions.

There was another important topic and let me just get it
out briefly for you, because we do want to make clear that this was
also an important part of the discussions -- that's the economic side
of our relationship with South Korea. There are three strands to
this economic relationship with this very dynamic economy: global,
regional and bilateral.

On the global level, both of us committed to successful
conclusion of the Uruguay Round by the December 15 deadline, and the
President was very forceful in raising this issue and urged the South
Koreans to improve their offers to contribute to a final successful
conclusion of the Round in such areas as financial services, the
tarification of agricultural products and binding some tariffs on
some industrial products.

The second strand is APEC. You're familiar, of course,
with Seattle and the approach there, so I won't run over that. As
you heard from their public remarks, both Presidents were very
pleased with the outcome of the Seattle meetings and where we go from
here on that. And that, of course, is relevant to trade and
investment and our economic connection.

The third strand is the bilateral. When the President
visited Seoul in last July, the two Presidents agreed to this
dialogue on economic cooperation. To open up Korea's market,
particularly for investment, as well as trade and cooperation from
our side with the Koreans, there was an agreement that we've gotten
off to a good start. But, again, the President urged the need to
make progress on this front as well.

So I wanted to get that out there because the economic
dimension is very important. But I know that you're primarily
interested, perhaps, in what my other colleague will now have to say.

SENIOR ADMINISTRATION OFFICIAL: Good afternoon. I
thought it would be useful to spend a couple of minutes describing
how we came to the point where we find ourselves today in the nuclear
issue with respect to North Korea.

Not taking it back too far, but the whole thing began in
this administration on March 12 when the North Koreans announced that
they were intending to withdraw from the Nonproliferation Treaty.
That treaty provides a 90-day notice requirement. From the very
first moment, from within hours, we were immediately in consultation
with the Japanese, with the South Koreans. We were immediately
talking with our U.N. partners in the Security Council. And that
really has been the watchword from the beginning to this point.
We've done everything in terms of bringing the entire international
community together in working on this issue.

We worked toward getting the North Koreans back into
safeguards inspections, and when they were resisting that, we went to
the U.N. Security Council where on May 11 we got a resolution that
called on the DPRK to come back into compliance with its
international obligations. On the strength of that resolution, and
really at the behest of a large number of countries on behalf of the
international community, the United States agreed to engage in
bilateral discussions with the North Koreans to seek a resolution to
this problem. We said from the outset that we would only engage in
that process as long as it showed progress toward the two cardinal
objectives which have driven our policy since day one. One, a nonnuclear
peninsula and two, a strong non-proliferation regime. And
again, the decision that we made to engage substantively with the
North Koreans was one that was made with the full agreement of our
allies.

We met with them in June. We told them that to continue
meeting we would need to see specific kinds of progress. They would
have to continue to live up to NPT obligations. They would have to
maintain continuity of IAEA safeguards. They would have to refrain
from additional reprocessing activity. They could not engage in
refueling the five-megawatt reactor without having IAEA inspectors
present. This was what we said they needed to do for us to meet with
them again in July after our initial meeting in June. We did get
additional inspections out of them.

So when we met with them in July in order to secure
greater progress, we said now we need to see you re-engage
substantively with the South Koreans, with whom they had earlier been
engaged but had broken off talks. And furthermore, we need to see
you -- North Koreans -- engaged substantively with the IAEA. Not
merely to maintain the continuity of safeguards, but to address the
issues that divide you.

And as we came around to September, when we were hoping
the would have met those conditions, they had not. And therefore,
again, after consultation we decided that the condition we had laid
out at the outset of these talks to wit, that you have to have
continued progress for us to sustain these talks, was not being met.
And we decided in consultation with the Japanese and the South
Koreans to go to a different approach.

These talks, in terms of going to a new approach took
place at a number of levels over several weeks and really picked up
pace in Seattle over the last few days. It is that process that
concluded this morning when the two Presidents met. And they spent a
fair bit of time having had their staffs agree in broad outline what
the general approach would be going over precisely how we would
characterize the new steps that we are approaching today. And that
is the genesis of this phrase, "a broad and thorough approach" to the
problem. Now, what do we mean by a broad and thorough approach?
Good question. (Laughter.)

We mean a couple of things. One is, it is something to
be viewed in distinction from the step-by-step approach which we have
decided simply is not producing our two objectives. And -- so that
we would go to the North and we would say we would be prepared to
discuss the full array of these kinds of nuclear and security-related
issues with a view to finding a resolution to the nuclear problem
that would have you come back into compliance with all of your
international obligations. And at the same time, if you do that, we
would be prepared to discuss a broader array of issues ourselves.

Q Such as --

SENIOR ADMINISTRATION OFFICIAL: Can I get to the end of
this? In the context of these discussions, obviously questions arose
as to how to deal with U.S.-R.O.K security commitments and preserving
security on the Peninsula and our exercise schedule and that sort of
thing. So this brings us to a for instance which is with respect to
Team Spirit. And on Team Spirit, we decided that if -- we will
continue to consult with them and in the event that they meet the
conditions that we have laid out, in terms of coming back into
compliance with international norms, we would reconsider this
situation and make our recommendation to the South Koreans based on
what the security requirements on the Peninsula are as influenced by
what the North Koreans do with respect to the nuclear issue.

But I'd like to get out the second element of what the
broad and thorough approach is. So, one is simply to engage on a --
instead of in a step-by-step way that says before you get to this
meeting you've got to do this step, before you get to that meeting,
you've got to do that step, we're going to say, these are all the
steps we need to see from you. And the second thing is, we don't get
to have that discussion, however, until you meet the conditions that
we have already laid out. And those, as probably you are all aware,
are number one -- as I said a few moments ago -- you've got to reengage
with the South, and two, you've got to maintain continuity of
IAEA safeguards.

So the point here is to bring now, given the added
urgency of the situation -- in light of the degrading situation with
the safeguards regime in North Korea -- to bring it as rapidly as
possible to a resolution of the nuclear issue that would have them
back into compliance with the international regime.

Now, what happens -- of course we have to ask what
happens if we don't get the desired results. And on that, again, we
have been quite clear. We are not eager to find ourselves in a
situation of imposition of sanctions, but we have made it very clear
-- and if you look at Ambassador Inderfurth's statement in the U.N.,
you'll see this -- that at such time as the IAEA says the continuity
of safeguards is broken, then we will have no choice but to return
the matter to the U.N. Security Council for further measures that are
-- that could obviously include sanctions. And while we do not look
for that, we would not shrink from that if that becomes necessary.

That, in a nutshell, is sort of where we've been and
where we are. And I'd be happy to take any questions.

Q How much time do you have before you lose this
continuity? Some have suggested it's already occurred.

SENIOR ADMINISTRATION OFFICIAL: It turns out that this
is something we discuss frequently with Hans Blix at the IAEA.
Continuity of safeguards turns out not to be a binary function where
it's like turning on or off a light switch. There are a variety of
things that the IAEA does. They've got seals, they've got cameras,
they've got various inspection procedures. And the agglomeration of
these things gives you a certain level of confidence. That
confidence has begun to erode. And Hans Blix said so on November 1
in the United Nations.

I can't give you a date-certain as to when a particular
line is crossed.

Q Do you think it's a matter of weeks or months, or
what's your sense --

SENIOR ADMINISTRATION OFFICIAL: I would say it's a
matter of urgency. I can't give you a precise date.

Q How are you going to persuade the Japanese and the
Chinese to go along with this move to sanctions when and if you have
to get to that point?

SENIOR ADMINISTRATION OFFICIAL: Well, from the very
beginning this has been very present in our mind. Obviously, for
sanctions -- if we were to come to that to succeed, obviously you
need the broadest possible agreement among the nations closest and
most effective, and you've named two of the key countries.

And so, we have to maintain the rock-hard solidarity
that we have had with the Japanese and the South Koreans, and we have
to persuade the Chinese that we have, in fact, exhausted the
diplomatic alternatives. Because the Chinese have actually been very
consistent in what they've said to us and what I think they've said
to others on this question. They don't want to see a nuclear
peninsula any more than we do. They have expressed the tactical view
that patient dialogue is a better prospect to produce results than a
"confrontational" approach.

So, part of what we've been doing at the same time we've
been trying to persuade the North Koreans to come back into
compliance with international norms is to demonstrate not only to
China, but indeed to the world that we have made a good-faith effort
to resolve that situation in that kind of a manner. That is an
essential predicate to any effective implementation of sanctions.

Q Do you believe there's any prospect that, given
this stick that's being held over the North Koreans as well as the
carrot, that the North Koreans will comply in the next month or two
with these international inspections and resume a dialogue with the
South?

SENIOR ADMINISTRATION OFFICIAL: That is certainly our
hope. There have been cases in the past where the North Koreans have
done things that we have wanted them to do. And I didn't start the
history that far back, but the North-South nuclear agreement of
December, 1991 was something that people thought was impossible.
They agreed finally in early 1992 to IAEA safeguards after having
eschewed them since 1985, so our hope is that by making it very
clear, as the President did this morning, that there are two futures
ahead of them, and one of them has at least the possibility of things
that they would like to see in terms of a broader relationship with
the world community, and on the other hand a path that is much less
desirable of increasing international pressure, that they will make a
rational choice.

Q Can I follow up? Was President Kim reluctant? He
refused to say what U.S. officials have said in the past that if the
North Koreans accept these conditions, the U.S. would recommend
suspending Team Spirit next year. He didn't want to go that far.
And, as a result, you're not willing to say that today, either;
neither was the President. Is that the result of President Kim's
refusal to go that far?

SENIOR ADMINISTRATION OFFICIAL: I don't think so. I
mean, I think that there actually has been a fair bit of confusion on
this point. We have had a very consistent line on this, which is,
namely, that we will make a recommendation to the South Koreans. We
will base that recommendation on our analysis with which we consult
with them all of the time, and you've probably been on these trips
every November -- we consult very close with them -- what are our
security requirements on the Peninsula.

All that was said today was that that calculation is
sensitive to what the North Koreans do from here on out. And so,
we're not at the last possible moment on making a decision on Team
Spirit; we will therefore make our recommendation to the South
Koreans based on what we see.

Q Can you tell me when you will be talking to the
North Koreans and on what level?

SENIOR ADMINISTRATION OFFICIAL: I don't want to say
exactly when. We will be talking to them soon, but we will be using
-- we are not going to -- I should make it very clear -- we're not
going to have a third round. But we will be talking to them in the
usual sort of -- very soon, I would think.

Q Like how very soon? This week at the U.N.? What?

Q Tomorrow, right?

Q Tonight? (Laughter.)

Q Saturday at the U.N. Why can't you --

SENIOR ADMINISTRATION OFFICIAL: I would think it would
be this week sometime.

Q Are the economic sanctions not attractive, as the
President said, because China is not going to go along with them, and
therefore be approved at the U.N., or could you be very specific as
to whether any kind of other sanctions by certain countries could be
imposed?

SENIOR ADMINISTRATION OFFICIAL: We are, of course,
looking a lot at the question of if we reach that contingency, how
best to craft, then, to be effective. It is no secret that North
Korea is not the most exposed nation in terms of the effectiveness of
sanctions, and that is why it's absolutely critical that if we go
forward with sanctions, we do so with strong support from all of the
countries.

We are looking at specific permutations on how we might
be most effective.

Q What are the other elements in your broad and
thorough relationship -- to the North Koreans?

SENIOR ADMINISTRATION OFFICIAL: What we decided today
was that we would move to that kind of approach and that to get to
that approach, the North Koreans had to do a couple of things in
terms of IAEA and the North-South dialogue. We will not continue,
having made that kind of shift, to fill in that box as to exactly
what items we would be discussing with the North. We're not going to
do that ahead of doing it with the South Koreans. So we are just in
the process of launching that process now.

Q At one point, the administration was flirting with
the idea of announcing -- agreeing to announce at the same time the
North Koreans met the two conditions that Team Spirit would be -- the
idea of being that if they agreed to the inter-Korean dialogue,
and if they agreed to a resumption of routine inspections we would
announce at the same time that Team Spirit is over. President Kim
was quite explicit. He said I think this matter of suspending Team
Spirit exercise should be dealt in its own, on its own.

So I assume that he told you that they didn't like that
idea, and that -- my second question is, they seem to have a kind of
a phobia about this idea of a comprehensive package or anything that
would give a hint of a package deal somewhere later down the line.
Can you explain exactly why they're so worried about conveying that
message at this point?

SENIOR ADMINISTRATION OFFICIAL: Sure. First of all, I
don't know exactly what you're drawing from. I don't think we've
ever said that if they do X and Y, Team Spirit will be "over." What
has been thought about is what happens vis a vis Team Spirit 1994:
will we or will we not suspend it? And that is the only thing that
has been in play in this context. So I don't know if that answers
your first question.

Q No, it doesn't. President Kim made it quite clear
that he wanted to deal with Team Spirit on its own, separate from any
compliance with these two conditions. The United States government
did, at one point in the last couple of weeks, flirt with the idea of
agreeing to a simultaneous --

SENIOR ADMINISTRATION OFFICIAL: No, I think I can
square that circle. The inference I drew from that when I heard it
at the same time you did is that we will analyze Team Spirit as a
security issue in the context of our overall combined forces
consultations, and that that would be decided in terms of our
security requirements. Those security requirements, of course, are
affected by what happens on the nuclear issue which are related to
the other two points you raised.

On the second point, about the comprehensive package, as
I know you know, there has been a lot of speculation -- what do we
mean. And, unfortunately, in law school, somebody told be about
terms that get barnacled. And this phrase, before it was even born,
was already barnacled by different people with different barnacles.
Some people thought it meant one thing, some people thought it meant
another thing. So the decision that was taken this morning was,
nobody had meant to imply anything in particular other than this
shift in approach, and that was why they got rid of that formulation
and adopted the other one.

Q Can you elaborate, then, on what did happen between
yesterday when President Clinton promised to outline a new approach
and today when the two leaders seemed so unable to do so in any clear
way?

SENIOR ADMINISTRATION OFFICIAL: It was clear to me. I
don't think that anything happened in the sense that -- you heard a
new approach, which is we are not going to permit any longer a slow
kind of step-by-step process. Neither the progress that we saw from
the North Koreans in responding to that step-by-step approach, nor
the urgency which is now brought upon us by the eroding safeguards
conditions permits that. And so you did see a new approach adopted,
and that was it. And, the second part of it, as I said, was that it
would not be triggered until they met these additional conditions.

Q Is it the timing that's involved? Is it that
instead of offering something to them and having some sort of
phasing-in either economic or diplomatic or on the military side --
that they have to actually produce the results before we will take
any steps?

SENIOR ADMINISTRATION OFFICIAL: There is timing. It is
a timing thing in a sense that we are no longer going to -- there
will, of course, be steps that have to be taken along the way. But
what we want to get out of is something that says, okay, before we
meet next July, you've got to do this inspection. We don't want to
be nickel-and-dimed, we don't want to do it inspection by inspection.
We don't want to trade a specific statement that we would make for a
specific inspection that is only part of the larger problem with the
north.

Q But why didn't the President outline what his
specific incentives would be today?

SENIOR ADMINISTRATION OFFICIAL: That was never in the
cards. We are still in the process -- well, it wasn't in my deck.

Q He said a number of options.

SENIOR ADMINISTRATION OFFICIAL: We are still discussing
among ourselves and we still need to discuss with the South Koreans
exactly what is involved. There have been a number of things that
have been on the table vis a vis the North Koreans. They have been
very concerned about what they describe as people stifling them. We
have made clear for a number of months things that could be done in
terms of nondeployment assurances, in terms of various protocols that
could satisfy them that they were not under a nuclear threat -- that
sort of thing. And so I'm sure that in the weeks -- it is urgent, so
we will in the weeks head be trying to refine exactly what those
options are so we know what to present.

Q Are you really saying that the South Koreans and
the United States agreed on everything in the approach today, that
there weren't any sticking points here?

SENIOR ADMINISTRATION OFFICIAL: I'm saying that we are
in complete agreement with the South Koreans on how to proceed, that
the two Presidents, when they met this morning, went over in some
detail exactly how to present that. But I don't think you can see
any daylight between us.

Q Given what's happened in the past months with North
Korea, is there anything in this new approach that would make the
North Koreans more likely to accept it? It sounds like what you're
doing is trying to prove, not to North Korea but to the Chinese that
you're taking every last step before you move on to sanctions.

SENIOR ADMINISTRATION OFFICIAL: We do not see that as
an inevitable progression. We are certainly trying to demonstrate to
the world community that we are doing a responsible jobs of trying to
bring this thing to closure. I do think that there is a prospect
that you would see some kind of a positive response on this. I
invite you all to read the statement from the Vice Foreign Minister.
They are expressing concerns on the security issue that they are
likely to be stifled. I think those are the kinds of issues that can
be addressed that, if they come into compliance with their
international obligations, they will find themselves to continue to
benefit from, for example, the negative security assurance of NPT
parties' benefit from that they won't face the specter of a nuclear
threat, which they believe they face. And so I do think that, to the
extent that those are things that they are interested in pursuing
that there is something for them to find.

Q But in his policy, is there something that would
make them feel those things are more likely than in the previous --

SENIOR ADMINISTRATION OFFICIAL: We've told them we
would be prepared to engage with them on the broad range of issues.
They would, of course, be at liberty to raise their own concerns, and
I would presume that they would in some hope of having them
satisfied.

Q But had they gotten into compliance previous to
this, those options would still be open, would they not?

SENIOR ADMINISTRATION OFFICIAL: Which options?

Q The idea that you could move on to other aspects of
the relationship if they had followed through on the step-by-step
approach. That still would have -- they would have been able to,
would they not?

SENIOR ADMINISTRATION OFFICIAL: If they had carried it
through to the end. The problem was that we've got an asymptotic
decline in their compliance with a step-by-step approach, so it kept
moving off in the distance.

Q What is the theory behind the new approach? That
is, why do you think it will be more successful in reversing that
asymptotic decline?

SENIOR ADMINISTRATION OFFICIAL: My own guy is laughing
at me over here. (Laughter.)

Q I don't blame him.

SENIOR ADMINISTRATION OFFICIAL: Thank you. The North
Koreans, from the beginning

Q I don't blame them. (Laughter.)

SENIOR ADMINISTRATION OFFICIAL: Look, thank you.

Q For extra credits.

SENIOR ADMINISTRATION OFFICIAL: The North Koreans, from
the beginning, from the first time that they expressed their views
directly to us, expressed serious concerns about being stifled, about
being strangled, about the prospect of facing a nuclear threat from
not only us, but from others in the region. We are now going to go
to them and say, look, you have concerns; we have serious concerns on
our side. We have a possibility to resolve the entire issue in a
manner that would bring you all back into compliance with
international norms, and that would permit the rest of the world to
begin to deal with you.

Ruth, we would like to show them two futures and make
that clearer. And I think that a comprehensive -- I should not say
that -- that this new approach is more likely to do that by spelling
out two futures for them; one of increasing international pressure,
and one of an opening door to new possibilities. I think that that
creates new possibilities.

Q Can you explain something to me? I wonder if this
is based on a little bit of unreality, because numerous U.S.
officials have -- us that they believe that North Korea is producing
these nuclear materials, and you're saying they have to allow
inspections but if those inspections are done through they may prove
what U.S. officials already believe: that they are there. So, if
they are there, what then happens?

SENIOR ADMINISTRATION OFFICIAL: Well, there is a great
deal of uncertainty about what the North Koreans have done or have
not done in their nuclear program. This is a classic case where we
do not know what we do not know. We do know that we have strong
reason to believe that they have not declared honestly to the IAEA
all of their activities. We do believe that they have reprocessed
plutonium that has not been disclosed. And therefore, to answer your
question, there will always be some uncertainty, but what we're
trying to do is to minimize that uncertainty and the more
transparency have into the program, the less uncertainty we'll have.

Q And also, can you just give a little snapshot of
what's going on at the border? What's the number of North Korean
troops? Has it increased recently? What's the number of South
Korean and U.S. troops?

SENIOR ADMINISTRATION OFFICIAL: I don't want to go
into specific numbers. There is a large concentration of North
Korean troops within 100 kilometers of the DMZ. It is a situation
that has been with us for some period of time, and I really wouldn't
want to go beyond that.

Q There's a phrase that you all used a fair amount
that seems to have disappeared from the lexicon which is "other
options." The line was, "We're going to try this, if it doesn't
work, we may go to the U.N. for sanctions and there may be other
options." That seems now to have disappeared. Why?

SENIOR ADMINISTRATION OFFICIAL: I'm not aware of the
lexicon having changed that much. We've been very clear that if the
North Koreans do not come back into compliance, that if continuity of
safeguards is broken, we'll have no choice but to go to the U.N.
Security Council. Once you're in the U.N. Security Council, all
kinds of options are possible, and I really would not want to
speculate on which ones would be pursued.

Q Where do the special inspections fit in this
sequence? They're coming into compliance, you mean with the routine
IAEA safeguards inspections?

SENIOR ADMINISTRATION OFFICIAL: And at the end of the
day, there's no resolution of the nuclear problem vis-a-vis North
Korea that does not include resolving the question of access to those
sites.

Q That is several, could be several steps down the
road in the future, not immediately in terms of the conditions for --

SENIOR ADMINISTRATION OFFICIAL: It would certainly be
to the extent that we're talking about a new approach, we would be
discussing that problem in this new approach. Exactly when it
happens, I cannot tell you. It is a different kind of a problem than
the continuity of safeguards problem in the sense that when the
routine and ad hoc inspections are interrupted, and when you lose
continuity of safeguards, they may do an additional diversion of
material, whereas, the special inspections are, if you will, forensic
in nature trying to get at stuff that they've already done and find
out exactly what kind of quantities they've produced.

Q Do you suspect that they've been reprocessing
plutonium and taking other actions, so how close are they to having
the bomb?

SENIOR ADMINISTRATION OFFICIAL: That is a very
difficult question. For a policymaker, you cannot assume that they
haven't made serious progress in that direction and you all have
heard the judgments of the DCI when he has testified before Congress.
So, we cannot assume that it's not that, but I cannot tell you that
we know with precision what they have or have not done.

Q Well, if that's the case, then why aren't the
continuity of safeguards effectively ended then, if we do not know
what we do not know?

SENIOR ADMINISTRATION OFFICIAL: Because there's a
tremendous possibility that other things could happen. If you look
at what the DCI said in public, I think he said they could have
enough fizzle material for one to two devices. Now if you unloaded
this whole core from the five-megawatt reactor, you've got a much
bigger problem on your hands.

Q Are they close to removing or changing the core of
that reactor? And is that another matter of urgency for you?

SENIOR ADMINISTRATION OFFICIAL: This is something we've
been worried about for some time. We don't know exactly when they
will feel constrained to swap out the core. It's not clear they have
exactly the same kind of NRC regulations that we do. But we are
keeping a very close watch on how that proceeds and we would consider
it a matter of great gravity if they were to do that. I think it is
worth underlining that time is not on our side here. And that this
is a matter of increasing urgency and we are dealing with it in that
sense.

Q Will you know, with various means at your disposal,
if they do that?

SENIOR ADMINISTRATION OFFICIAL: We have some reason to
believe that if they were to stop operating that reactor we would
know that.

Q Since it's a matter of urgency, why don't you set a
deadline?

SENIOR ADMINISTRATION OFFICIAL: We don't feel that
setting a specific deadline serves our interests. We had a specific
deadline of three months from March 12th. We were able to get the
clock stopped then. For now, we are dealing with it as a matter of
urgency. We will know at such point that we feel that safeguards
conformity has gone down to the point where we've lost confidence,
we'll take action at that time. But I don't think it's fruitful to
speculate what that date might be.